I have a friend who insist that if you bring money from my UK state pension and put it directly into paying off a home loan here in Australia that it would be tax free or at a low tax rate. I also have a small amount in a private pension fund in the UK, if I take out a small tax free lump sum, I have been told that I will have to pay tax on that here also, no reciprocal arrangement tax wise between both countries. And that any remaining funds that withdraw I will have to pay UK tax at an emergency rate and then I assume I will have to fill out a UK tax return to try to claim it back and then still end up pay tax on that amount again here in Australia. I have put the question to the different tax authorities, but they are not able to give a straight answer, I have paid a financial adviser who had limited knowledge of the UK pension & tax system and in truth was unable to advise me. We are talking about a small amount of money here not hundreds of thousands of dollars and if I were to seek the help of large firm specialising in tax matters of this kind, I would probably be better off just paying the tax in both countries, but I can at least try to find an alternative answer, just in case there is an easy solution.

If you receive a UK state pension and transfer some or all of it to Oz then you have to declare it on your annual tax return as income (in fact you have to declare all even if you don't transfer) and it will be added to your taxable income for the year you receive it.

What you do with it is irreverent (unless you put it into an Oz super). You will also have to fill in a Australia-Individual 2003 tax form if you are being taxed in the UK to obtain a refund of this tax.

Here is the form https://assets.publishing.service.go...-indiv2003.pdf

Their is reciprocal arrangement tax wise between both countries and the above form is how you implement it. Not sure about a lump sum from a pension but I recieve a company [ension from the UK tax free but have to declare it on my OZ tax return.

If you are eligible for SAPTO it gives you a higher tax free threshold for your total income.